Utility Sector Research Articles

Operational Sustainability of the Firm

This article presents the research results that assess a firm’s operational sustainability by combining the Degree of Operating Leverage (DOL) with the Current Liquidity Ratio (CLR) to present the Operational Performance versus Financial Solvency (OPFS) binomial, using a non-parametric model. The combination of the DOL with the CLR identifies metrics that indicate that a firm operates at full installed capacity and injects synergy at the generation of financial assets. The model was tested with data from standardized financial statements from 48 firms distributed among 6 sectors of the Brazilian economy, from 2007 to 2017. The results obtained suggest that, when a firm operates at full installed capacity, the DOL varies between 1 and 2, and the CLR is higher than the DOL. From the 6 sectors contemplated by the sample, 4 stand out by operating at full installed capacity with the CLR higher than the DOL, and 2 sectors signal some idleness with the DOL above 2 and the CLR lower than the DOL, such as the Public Utilities Sector (PU) indicating the highest efficiency among all. These results are relevant to illustrate that the combination of the DOL with the CLR is robust enough to evaluate a firm’s operational sustainability.

The influence of Bitcoin on Portfolio Diversification and Design

We employ a VARMA DCC-GARCH model to search for portfolio diversification with Bitcoin in global industry portfolios and bond index. We find lower dynamic conditional correlations between Bitcoin and industry portfolios & bond index, allowing an investment in Bitcoin to hedge the risk against industry portfolios and bonds. The most effective hedge in a Bitcoin/industry (bond) portfolio is to short Utilities sector. Results are robust to the use of US industry portfolios and a cryptocurrency index instead of global industry portfolios and Bitcoin, respectively. Our results can help investors make informed decisions with regard to risk management and portfolio analysis.

Part A: Advances in tools and techniques for estimating biogas production and treatment in anaerobic-based STPs Technical Note 1 - Topics of interest

The management of biogas in sewage treatment plants (STPs) with anaerobic reactors is still a challenge in Brazil. Problems related to odor, corrosion, occupational risks, energy losses, and even to greenhouse effect, are still a reality. The problems related to the energetic use of biogas from UASB reactors are mainly associated with the presence of hydrogen sulfide (H2 S) and humidity, as well as fugitive biogas emissions, which make it difficult to accurately estimate biogas production. In this sense, this Technical Note (TN) aims at addressing the main aspects related to biogas production estimate and biogas treatment in STPs with UASB reactors. This contribution derives from the experience of experts and professionals of the academic and water utility sectors, as well as from the specialized literature. The topics of interest are summarized in this TN, the first of this collection, “Valoration and management of gaseous by-products of sewage treatment. Part A: Advances in tools and techniques for estimating biogas production and treatment in anaerobic-based STPs”, being individually detailed in the following Technical Notes that integrate the collection.

Public Danger of Corruption Crimes in the Sphere of Housing and Communal Services

Currently, housing and communal services as a specific form of socio-economic relations are most susceptible to criminal influence. The Author of the article examines corruption crimes in the field of housing and communal services (HCS) from the point of view of public danger. Corruption as a social and legal phenomenon continues to be a dangerous factor in the development of the housing and utilities sector. The article draws attention to the systemic nature of corruption crimes in the housing sector. It is noted that the majority of crimes in the housing and communal sector are stable corruption and are committed by officials, as well as by persons performing organizational, administrative and administrative functions at the enterprises of housing and communal services. The criminals have adapted to the new system of functioning of the housing and communal services and forms of control over its activities. They began to more often involve enterprise accountants, relatives and other close persons in their criminal schemes, thereby forming a stable criminal group in which all roles are carefully distributed and thought out. The Author analyzes judicial practice in corruption-related cases in the field of housing and communal services. The most typical ways of committing crimes in this area are shown. Attention is paid to violations related to the resettlement of citizens from hazardous housing. The issue of the organization of natural monopoly in our country, which reduce the effectiveness of the existing measures of state control and which directly affect the growth of corruption crimes, is investigated. Attention is focused on the deliberate obfuscation of the property rights of resource-supplying organizations and the withdrawal of income to offshore zones. The factors that contribute to the growth of corruption crimes in this industry are noted. On the basis of the study, the author concludes that the social danger of corruption crimes in the sphere of housing and communal services is conditioned by a high level of organization, selfish involvement of officials in the redistribution of funds in their favor, as well as the intricacy of schemes and methods of withdrawing funds from enterprises of housing and communal services.

Algorithms and models of power losses in circuit breakers installed in networks

Determination of the main characteristics of the topology and technical condition of equipment underoperating conditions is necessary for analyzing and assessing power and electricity losses in intrashoplow-voltage industrial power supply networks. A comparative analysis of the technical characteristicsof automatic circuit breakers VA57-31 (KEAZ), NSX100 TM-D (Schneider Electric), DPX3 160 (Legrand), Tmax XT1 TMD (ABB) has shown that the main technical parameters of the machines are close in their values. At that it has been found out that automatic switches of the BA57-31 series have the lowest value of power losses per pole (7.5 W), whereas the automatic switches of the Tmax XT1 TMD series have the highest value (10 W). Thus, under the operating conditions of the equipment, the lowest value of power and electricity losses is characteristic of low-voltage electrical networks with installed circuit breakers of the BA57-31 series, and the highest value of losses is noted in in-shop systems with installed circuit breakers Tmax XT1 TMD. Using catalog data, the dependences of active power losses in circuit breakers on rated currents have been established; the algorithms have been developed and the obtained dependences have been modeled using approximating functions. The standard deviation of the compiled approximating functions has been calculated. Analytical expressions of the dynamics of power losses per pole have been determined as a function of the rated current. The graphical dependences of the investigated parameters of low-voltage equipment have been presented. The developed models are recommended to be used to increase the reliability of the assessment and refinement of the amount of active power and electricity losses in low-voltage electrical networks of industrial power supply systems, agrotechnical complexes, and enterprises of the public utility sector.

The role of financial analysis using financial models to predict the financial stumble on the Saudi public utilities sector: An applied study: دور التحليل المالي باستخدام النماذج المالية للتنبؤ بالتعثر المالي على قطاع المرافق العامة السعودية: دراسة تطبيقية

This study aimed to find out the role of financial analysis using financial models to predict the financial stumble on the Saudi public utilities sector. The study was based on the financial analysis of the financial lists published by the sample of the study of the Gas and Manufacturing Company (Gasco) and the Saudi Electricity Company listed in the Saudi Capital Market Authority. During the period (2009-2018) I followed the descriptive analytical approach. The study found the effectiveness of the Abdul Rahman model to predict the financial stumble on the public utilities sector, and the low effectiveness of the Altman model and the Kida model to predict financial stumbles on the utility sector. The study also recommended encouraging audit offices to add financial analysis services to the possibility of predicting and addressing financial stumbles, directing companies using financial models that help predict financial stumbles, encouraging investors to use financial models that help predict financial stumbles to make the right decision, and directing researchers in the study of financial default forecasting on the insurance sector using the Abdul Rahman model.

Time-frequency connectedness between Asian electricity sectors

This study examines the connectedness of the electricity sector in Asia by employing the connectedness models of Diebold and Yilmaz (2012) and Barunik and Krehlik (2018). Our sample includes the following Asian countries: China, Hong Kong, India, Japan, Malaysia, Pakistan, Philippines, South Korea, Thailand, and Vietnam. Our full sample analysis reveals a strongly connected electricity sector in the sample Asian countries, signifying a substantial influence of Asia’s electric utilities on each other. Moreover, our frequency-based analysis exhibits that the connectedness between electricity sectors in Asia is more pronounced in the short-run compared to the long-run horizon. Further, we explore the time-varying connectedness by employing a rolling window analysis that shows the dynamic nature of connectedness and reveals the significant effect of important events like the Chinese financial crisis and the ongoing pandemic crisis. We also explore the connectedness between Asian electricity utility sectors during turbulent times by employing subsample analyses covering the Chinese financial crisis and Pandemic crisis periods. The subsample analyses show that market-wide uncertainty drives up the connectedness, and it is relatively more pronounced for short-run frequencies and during the pandemic crisis period. The network connectedness analysis suggests that regulators could identify countries that most threaten system stability in the Asian electricity sector.

Who left riding transit? Examining socioeconomic disparities in the impact of COVID-19 on ridership

The COVID-19 pandemic has led to a globally unprecedented decline in transit ridership. This paper leveraged the 20-years daily transit ridership data in Chicago to infer the impact of COVID-19 on ridership using the Bayesian structural time series model, controlling confounding effects of trend, seasonality, holiday, and weather. A partial least square regression was then employed to examine the relationships between the impact of ridership and various explanatory factors. Results suggested: (1) COVID-19 pandemic exerted significant effects on 95% of transit stations, leading to an average 72.4% drop in ridership. (2) Ridership declined more in regions with more commercial lands and higher percentages of white, educated, and high-income individuals. (3) Regions with more jobs in trade, transportation, and utility sectors presented smaller declines. (4) Regions with more COVID-19 cases/deaths presented smaller declines in transit ridership. Findings provide a timely understanding of the significantly reduced ridership during the pandemic and help transit agencies adjust services across different socioeconomic groups and space to better constrain virus transmission.

Проблемы электроснабжения в коммунально-бытовом секторе Арктической зоны Республики Саха (Якутия)

The article assesses the current state and problems of the power supply system, highlights the most pressing problems in the public utilities sector in the Arctic zone of the Republic of Sakha (Yakutia). On the basis of statistical processing of information by subdivisions of JSC Sakhaenergo, the authors present an analysis of the structure of generating capacities and the dynamics of the installed capacity of power plants, including those based on renewable energy sources. Diesel power plants account for the largest share of the installed capacity, with renewable energy sources accounting for less than 1.4%. The main problem in power generation is equipment wear. In total, in the Arctic uluses of the republic in the communal and household sector, the standard resource for operating time since the start of operation exceeded more than 30% of the total number and 20% of the total installed capacity of diesel units, of which 60% are operating after major repairs. The authors outline main problems of fuel supply for the considered Arctic uluses: harsh climatic conditions, difficult transport accessibility, unstable hydrological situation, insufficient amount of dredging work, and a shortage of special road equipment. The assessment of the wear of power transmission lines and transformer substations is carried out. Of the total length of overhead power lines, 18.5% exceed the service life limit. For cable lines, this figure is 50.6%. In five uluses, more than half of the installed capacity of transformers exceeds the standard resource. Assessment of the electricity losses level shows that, on average, they amount to 15% for district power grids. In a number of Arctic uluses, there are high energy losses in power grids as well as their constant growth. When replacing and reconstructing outdated infrastructure, it is advisable to implement measures aimed at reducing losses and increasing the capacity of lines.

A perspective on the use of ammonia as a clean fuel: Challenges and solutions

A perspective on the use of ammonia as a clean fuel: Challenges and solutions

CREATURE OF EFFECTIVE SYSTEMS OF ECONOMIC CONTROL IN HOUSING AND COMMUNAL SERVICES IN CONDITIONS OF TRANSFORMATION OF GENERAL MANAGEMENT PRINCIPLES IN INDUSTRY

The purpose of this article is to summarize the main goals and tasks of management in the housing sector, to formulate on their basis the modern management principles in researched industry, as well as to identify the influence of general management principles in the housing sector on building effective systems of economic control at the enterprises of the studied sector. In the article the aggregative units of general and special objectives and goals of management in the housing sector are systemized. On the basis of this summarizing, general principles of management in the studied industry that should be at the core of building an effective system of economic control, as a function of management, were formulated. It was also systematized the main factors that influence on the systematic and complex management and should be taken into account when constructing effective systems of economic control in the housing sector, with the goal orientation of such systems in providing control in the interests of consumers of utility services. It was concluded that when using the principles of focus, systematic and complexity to build effective systems of economic control in the housing sector, scientists should apply other than planning-directive, sense. This sense consists on the direction of the management on the needs of consumers of housing and communal services, with maximum consideration of such factors as: the number and structure of consumers of public services; the volumes of consumption of utilities; the organizational-technological peculiarities of performers of housing and communal services. Keywords: housing and utilities sector, housing and communal services, principles of management, the system of economic control.

The Unprecedented Australian Stock Market Reaction to the Black Summer Bushfires and the COVID-19 Pandemic Outbreak: A Sectoral Analysis

In this study, we investigated the impact of the first wave of the COVID-19 pandemic on various sectors of the Australian stock market. Market capitalization and equally weighted indices were formed for eleven Australian sectors to examine the influence of the pandemic on them. First, we examined the financial contagion between the Chinese stock market and Australian sector indices through the dynamic conditional correlation fractionally integrated generalized autoregressive conditional heteroskedasticity (DCC-FIGARCH) model. We found high time-varying correlations between the Chinese stock market and most of the Australian sector indices, with the financial, health care, information technology, and utility sectors displaying a decrease in co-movements during the pandemic. The Modified Iterative Cumulative Sum of Squares (MICSS) analysis results indicated the presence of structural breaks in the volatilities of most of the sector indices around the end of February 2020, but consumer staples, industry, information technology and real estate indices did not display any break. Markov regime-switching regression analysis depicted that the pandemic has mainly affected three sectors: consumer staples, industry, and real estate. When we considered the firm size, we found that smaller companies in the energy sector exhibited gradual deterioration, whereas small firms in the consumer staples sector experienced the largest positive impact from the pandemic.

ПОВЫШЕНИЕ ЭКОЛОГИЧЕСКОЙ УСТОЙЧИВОСТИ КОНЦЕССИОННЫХ ПРОЕКТОВ

The purpose of this article is to study the question, to which extent the tasks of transition to sustainable urbanization through high-quality infrastructure investments are taken into account in the framework of concession agreements implemented in Russia. Analysis of the tender documentation for 70 announced tenders for concluding concession agreements showed that the criteria for competitive selection are, as a rule, economic indicators related to the volume of investments, financial obligations of the grantor and the time frame for the creation or reconstruction of the concession object. Environmental and social criteria when concluding concessions are used as long-term regulation parameters and target values for the performance indicators of the concessionaire, mainly in the utilities sector. The article substantiates the need for a transition to a sustainable-oriented approach to the implementation of concession agreements. The principle of project sustainability means that the project uses green technologies (use of energy obtained from renewable sources, environmentally friendly materials, innovative solutions to reduce carbon dioxide emissions, waste, rational use of resources, etc.) and sustainable institutions (rules, contributing to the achievement of social and environmental sustainability). The role of the state in enhancing the environmental sustainability of concession agreements should be to build a system of incentives that will primarily contribute to the initiation of a green multiplier and a more complete provision of environmental and social risks of the project implementation at all stages of its life cycle. This will be facilitated by the inclusion of sustainability criteria in the tender documentation and the assessment of projects at the pre-project stage using the total cost of ownership (TCO) methodology, which takes into account the costs, including for the elimination of negative environmental and social consequences of the concession project implementation. The inclusion of criteria to ensure that environmental requirements are met throughout the supply chain throughout the life of a project will provide multiplier environmental benefits. This will require additional costs on the part of the grantor, but it will create market incentives for environmental innovation and attract additional private investment in quality infrastructure.

Методика проведения гидравлических испытаний полипропиленовых труб на разрыв стенки

Polypropylene pipes have a significant drawback – high values of the heat-stretch factor. Material properties are changing as the temperature rises, and material is exposed to increased pressure in the pipeline. In such a case, operation of polypropylene pipes is becoming unsafe. One of the known methods for heat-stretch reducing is reinforcement. Reinforcement is performed with aluminum foil or fiberglass. The properties of reinforced polypropylene pipes have not been fully investigating. Such pipes must go through a long operation cycle in order to enterprises could evaluate their properties, primarily such reliability characteristics as infallibility, maintainability, lifetime, and storability. There are no separate Russian National Standards for the properties and characteristics of polypropylene pipes, and for their types in Russia, as well as standard methods for hydraulic tests on destructive inspection at manufacturers. In industry, as well as in housing and utilities sector, are used pipeline valves of different purpose. Reliable and safe enterprise operation depends on the smooth running of equipment, pipelines and valves. In this regard, authors propose to consider valves and pipeline together at determining of reliability indicators. A method of destructive inspection is proposed, whereby the valves and the pipeline are tested together, that are corresponding to the most probable scenarios for the emergency development. The concept basic part includes the definition of a mandatory algorithm for destructive inspection actions during hydraulic testing of polypropylene pipes on a test load. Strength test methods for ball valves, pipelines and their joints have been described in the relevant Interstate, Federal or Industry Standards and Regulations. However, it is advisable to introduce additional standards for static strength testing of polypropylene pipes. The new standard will allow single out reinforced polypropylene pipes in a separate category, provide a definition for such pipes, and also take into account the influence of external factors on the condition of pipelines, their connections and valves.

AN INVESTIGATIVE STUDY ON SUSTAINABLE COMPETITIVE ADVANTAGE OF MANUFACTURE COMPANIES IN INDONESIA

The purpose of the research is to investigate the effect of external and internal factors on corporate performance and sustainable competitive advantage. The samples of the study are ten manufacturing companies in the pharmaceutical, cosmetic, and household utility sectors listed on the Indonesia Stock Exchange (IDX). The data analysis use PLS-SEM. The result shows that corporate performance is influenced by leverage and liquidity (internal factors) significantly but is not influenced by external factors significantly as well as organizational performance doesn’t impact the sustainable competitive advantage significantly. The results of this study can be a concern for companies that corporate performance is not the ultimate goal of a business. Still, it must be followed by a sustainable competitive advantage if the company wants the return is not temporary, but sustainable. The originality of the paper is the results of this study show that the competitive advantage of an industry or company can not only rely on one factor, from external or internal environmental factors.

The paradox of regulatory discretion

AbstractRegulatory authorities in the utilities sector typically employ economic evidence and analysis to make expert discretionary judgments under uncertainty. However, economic analysis does not provide clear answers regarding policy outcomes. This exposes regulators to environmental uncertainty, that is, uncertainty regarding the reactions of other actors in the institutional system to their decisions. When policy outcome and environmental uncertainty are high, discretion takes center stage. Will regulators pursue the course of action suggested by economic analysis and their expert judgment or not? What explains this choice? To answer these questions, we carry out a comparative analysis of three British regulatory authorities in the utilities sector: the Office of Communications, the Office of Gas and Electricity, and the Water Services Regulation Authority. We consider two key sectoral and organizational characteristics: the extent of market competition, and statutory discretion. We rely on interview evidence and documentary analysis and a principal–agent framework. Our analysis reveals a paradox: when environmental and policy outcome uncertainty are high, the higher the regulatory discretion, the lower the role of economic expertise in regulatory decisions. Our findings call for a normative reflection on the role of expertise in regulated sectors.

Risk Assessment of Public-Private Partnership Projects Using SMART Financing

Risk assessment is one of the main tools used in the implementation of public-private partnership (PPP) projects in any economic sector. Risk analysis is necessary for the formation of a resource-efficient system of distribution and risk management, i.e. a SMART system.Aim. The presented study aims to develop and test a risk assessment methodology for PPP projects based on the concept of SMART financing.Tasks. The authors formulate a criteria framework for the formation of PPP projects using the concept of SMART financing, develop a risk assessment methodology, and conduct applied research based on one of economic sectors.Methods. This study is based on the systematization of publications of Russian and foreign economists on the problem of forming public-private partnership projects using risk management tools, statisti cal and economic-mathematical methods for analyzing the economic indicators of the selected sector and the living standards in the regions of the Central Federal District (CFD), and a comprehensive approach to assessing the risks of PPP projects using SMART financing.Results. A criteria framework for the formation of PPP projects using the concept of SMART financing and a methodology for assessing the risks of PPP projects in the housing and utilities sector using the concept of SMART financing are developed.Conclusions. The practical significance of the study consists in the development of a methodology for assessing the risks of PPP projects using the concept of SMART financing, which is based on the principle of point distribution of financial resources based on risk assessment. This will make it possible to prioritize the distribution of financial resources in the implementation of PPP projects.

Ловушка собственности в цифровую эпоху

Objective: to identify trends in the use of property by entrepreneurs after the introduction of A. Harberger’s system and the complete digitalization of property relations.Methods: the article uses the methodology of the theory of inventive problem solving, which is used to assess the consequences of digitalization of property relations and the introduction of A. Harberger’s system.Results: having analyzed A. Harberger’s system, the author states that it is applicable only for the digitalization of property relations, since it provides maximum transparency of property rights, income generated by it, and the qualitative features of this property. A. Harberger’s system encourages the continuous transfer of property from one person to another, which can lead to a “no-property” regime. As a result, the entrepreneur’s property and profit-making techniques become publicly available, which undermines the foundations of entrepreneurship in the digital economy. Entrepreneurs find themselves in a property trap.Scientific novelty: in accordance with the methodology of the theory of inventive problem solving, the article identifies property objects classified by their functions: “engine”, “working body”, “transmission”, “computer”, and “energy source”. It is stated that the trends of technological improvement and digitalization turn the “computer” into the dominant factor of production, around which all production processes are built. This will increase its complexity, as well as the cost of purchasing and maintaining it. The production versatility of the “computer” will bring to the fore entrepreneurs who reduce the cost of the “computer” by providing its capacity for rent to the widest possible range of persons. As a result, today’s entrepreneurs will be transformed into administrators of access to the computer and into entrepreneurs of the non-digital, utility sector of the economy.Practical significance: the main provisions and conclusions of the article can be used to develop measures to maintain business activity in the new conditions.

Performance Measurement in Education Public Services Based on the Value for Money Concept

The growing interest in the performance of public services by citizens and public authorities force public service organizations to seek justification in the use of public resources. The public also require reassurance that public services provide value for money. This reflects the need for a comprehensive measurement and assessment of performance in the utilities sector. The selection of appropriate performance indicators is a key process in managing and monitoring the performance. However, this requires the participation of those organizations which this measurement concerns. The aim of the study is to present a proposal of possible performance indicators in education public services based on the Value For Money concept. The outcome of the study, in the form of a proposal for possible performance indicators, is enriched by feedback from education professionals and school heads through conducted structured interviews. The proposal of possible performance indicators can be an initial outline of appropriate performance indicators for the model for measuring and assessing the performance of public grammar schools in the future. It can also be an inspiration for other public service organizations in how to set appropriate performance indicators in relation to their objectives.

Valve and fitting pressure losses in compressible flow systems

AbstractCompressible flow is commonplace in the chemical, energy and utilities sectors. The design and analysis of compressible flow systems is complicated by the relationships between the Mach number, gas density, and gas pressure. Consequently, shortcuts and rules of thumb are sometimes applied in order to simplify the calculations. One such practice is the use of head loss coefficients to estimate pressure losses through valves and fittings in the same manner for both incompressible and compressible flow calculations. The limitations of common practices involving use of head loss coefficients in compressible flow systems are explored using a direct integration method to estimate pressure losses. Several examples are provided to illustrate possible errors associated with some common practices.